Question

Your company has the choice of purchasing two delivery trucks. One, The Zelot, costs $250,000 and depreciates $18,000 per year. The second truck, The Nile, costs $205,000 and depreciates $12,000 per year. You are trying to decide which truck is the better value. Write an equation for the depreciation of each truck over time

Answer 1

The depreciation equations for the Zelot and Nile trucks are D(t) = $250,000 - $18,000t and D(t) = $205,000 - $12,000t, respectively, which can be used to determine which truck is the better value based on depreciation over time.

Step-by-step explanation:

To write an equation for the depreciation of each truck over time, we would use the straight-line depreciation method. The depreciation equation for a truck can be described as:

D(t) = P - rt

Where D(t) is the value of the truck after t years, P is the initial purchase price, and r is the rate of depreciation per year.

Zelot Truck Depreciation

Initial Purchase Price (P): $250,000
Annual Depreciation (r): $18,000
Depreciation Equation: D(t) = $250,000 - $18,000t

Nile Truck Depreciation

Initial Purchase Price (P): $205,000
Annual Depreciation (r): $12,000
Depreciation Equation: D(t) = $205,000 - $12,000t

Using these equations, the company can compare the value of the trucks over time to determine which truck is the better value for purchasing based on their depreciation rates.